Know When To Sell With Dividend Stocks

One of the most important ways we minimize our investment risk occurs when our stock price is going down.  Because at some point, if the stock keeps going down, we will want to “stop” our losses.  This activity is actually called using “stop losses,” so that’s a new term for you here.

In order to set a stop loss, we actually decide up front, when we buy a stock, how much we are Read the rest of this entry »

Why The Markets Crashed – Outrageously Funny

For those who appreciate British humor like I do, this is a must see short video by British comedians John Bird and John Fortune.  They attempt to explain why the market crashed back in 2008.  Interestingly, they did this routine just before Read the rest of this entry »

Buy Stocks Like Tom Sawyer Whitewashing The Fence

You can buy stocks at a discount like Tom Sawyer had his friends whitewash his fence

In our last post on buying stocks at a discount, we talked about the method of setting a trap, like a mousetrap, for when the price of a stock came down to our discounted price. We used a buying technique called a limit order. And the best part of this method was that it was free.

It’s hard to beat free.

But in this post we are going to do just that.

The method we are going to describe always reminds me of the scene in Tom Sawyer where his Aunt Polly tells him he has to whitewash the fence in the front of the house. Tom was rather averse to work like this. So he came up with a rather theatrical strategy to get out of it – and get paid.

Whenever he saw one of his friends approaching, he would put on a big show of Read the rest of this entry »

Buying Stocks At A Discount – The Bus Stop Mindset

Use a bus stop mindset when buying stocks

We said in the earlier post about the Cool Mindset that the most critical part of buying stocks at a discount is to have the right mindset. And I admitted that may sound like a bunch of psycho-babble at first, but I’m sure you started to get the picture on just how important this is.

And here’s another mindset you will want to use. I call it the Bus Stop Mindset.

It can keep you from rushing out to Read the rest of this entry »

Buying Stocks At A Discount – Setting A Trap

Buy stocks at a discount by setting a limit order. This is like setting a mousetrap.

We said earlier in our Buy Stocks At A Discount series that having the right mindset was critical when buying stocks. And I admitted that may sound like a bunch of psycho-babble at first, but then we looked at two important mindsets.

They were the Cool Mindset (let cooler heads prevail) and the Bus Stop Mindset (stocks are like a bus stop – if you miss the bus, another will come around in five minutes). Both of these mindsets help you keep a more deliberate attitude when buying stocks, as opposed to just rushing out in a frenzy and paying top dollar.

Okay, so let’s say we have our mind right. How do we actually do this?

It’s pretty simple, really. We do two things. We pick the discount we want to try for, and we use a special kind of order to buy it.

I use a couple of methods to Read the rest of this entry »

Buying Stocks At A Discount – The Cool Mindset

Investor ice skater playing it cool

The most critical part of buying stocks at a discount is to have the right mindset.  Now I know that may sound like a bunch of psycho-babble at first, but I assure you it is critical. Let me explain.

Most investors just rush out and buy a stock because they Read the rest of this entry »

How You Buy Stocks At A Discount

Stocks For Sale - 20% Off Sign
When it comes to stock investing, when you buy and how much you pay is critical. Indeed, the success of your trade most often hinges on these critical points. That is to say you win or lose at this early stage in the game.

Successful investors like the legendary Warren Buffett are quite aware of this fact. And they use methods to buy their stocks at a discount.

On the other hand, the average investor seems to pay little attention to this. And so they always seem to overpay and buy at the wrong time. So this is an important difference to learn from.

Buying stocks at a discount lowers your risk and greatly improves your odds for profit. This is why the successful investors pay so much attention to it. So since buying stocks at a discount is so critical to your success, the buying differences between the successful investor and the average investor are important to Read the rest of this entry »

Janitor From Vermont Leaves $8 Million Fortune

A former janitor and gas station attendant in Vermont, who died a few years ago, surprised everyone by leaving an $8 million fortune to his local library and hospital.

What was his secret, everyone wondered?  And the answer turned out to be pretty basic.  Because, besides being industrious and frugal, which you may have guessed, he had invested in the stock market throughout the years.

This is actually not as surprising as Read the rest of this entry »

Why Invest In Stocks… Because That’s What The Wealthy Do

So why bother investing in stocks?  What’s in it for you?

And the answer is that stock investing can increase your wealth and income over time when done properly.

It does this for you in a number of ways.

For example, much has been made of the fact that there is a widening wealth and income gap in the US.  You hear this in the news all the time.  What they are talking about is the widening gap between the people in the top 10 percent of income earnings, and the bottom 90 percent.  And all the facts bear this out.  There is, indeed, a widening gap.

Top 10 Percent Share of Income ChartSource: Piketty and Saez, UC Berkeley

The income gap is the highest it’s been since the early 1920′s.  And the same can be said for the wealth gap, which has not been so high since 1927.  So wouldn’t it be a good idea to do what the top 10 percent are doing — to tap into that wealth and income too?

So what are the wealthy doing to make this happen?  Well, most of them are Read the rest of this entry »

Why Companies Pay You Dividends

Some of the best stocks to buy are dividend paying stocks.  These stocks will send you a monthly or quarterly check for your portion of their profits in the business.  So you get a nice income stream from them.  And the stocks can go up in value too.  So you get the best of both worlds – investing and speculation.

But why would companies pay you dividends?  Let’s look into that question.

Let’s say that you own shares of Hershey stock.  And for the next three months Read the rest of this entry »